MEDICLAIM INSURANCE

DESIGN OF STUDY
SCOPE
Human resources management starts the moment an employee joints an
organization and continues till he leaves the organization either on
account of retirement, registration and death or otherwise. It covers
every aspects of employee training, manpower planning etc

OBJECTIVES:
Human resource management is a fascinating and important subject. The
fascinating lies in fact that it involves people and decision involving
people artwork. It is human resources that determine the fact of an
organization. I have selected the topic of job satisfaction and
communication management because the quality of human resources is a
critical factor in the success of any organization and more in service
organization like banks.

MEDICLAIM INSURANCE

METHODOLOGY
In order to conduct the research an appropriate methodology became
necessary. In this direction both primary and secondary data were
required to be collected. The methodology for collecting secondary data
was taken from the different published books, article, journals and
relevant websites. The different libraries of the college, institution were
of much great help.
Questionnaire was prepared for the collection of primary data from
different banks. These forms i.e. questionnaire was given to different
banks for getting the information of their report on working of job
satisfaction and communication management along with different other
questionnaires. It was prepared to get detail information of an individual
topic so we can get proper information and also the knowledge of the
banks.
After finalization of the questionnaire it was decided to approach
different banks in the nearby areas. These questions were presented to
the employees. The primary data collection was restricted only to banks.
Thus the methodology became a preplanned strategy in collecting,
editing, tabulating and interpreting the required information for the
research.
Hence, the methodology relied on both primary and secondary data with
the help of questionnaire, discussions observations as well as published
work and unpublished work.

MEDICLAIM INSURANCE

INSURANCE: AN INTRODUCTION
Insurance may be described as a social device to reduce or eliminate
risks of loss to life and properly. It is a provision which a prudent man
makes against inevitable contingencies, loss or misfortune.
Once Frank H. Knight said "Risk is uncertainty and
u n c e r t a i n ty i s o n e o f t h e fundamental facts of life." Insurance is
the modern method by which men make the uncertain certain and the
unequal; equal. It is the means by which success is almost guaranteed.
Through its operation- the strong contribute to the support of the
weak a n d w e a k s e c u r e , n o t by f a v o r s e n t b y r i g h t d u ly
p u r c h a s e d a n d p a i d f o r, t h e support of the strong (Calvin
Coolidge.)
Under the plan of insurance, a large number of people associate
themselves by sharing risks attached to individuals. As in
private life, in business also there are dangers and risks of
different kinds. The aim of all types of insurance is to
make provision against such dangers. The risks which can be insured
against include fire, t h e p e r i l s o f s e a ( m a r i n e i n s u r a n c e ) ,
d e a t h ( l i f e i n s u r a n c e ) a n d , a c c i d e n t s a n d burglary. Any risk
contingent upon these, may be insured against at a premium
commensurate with the risk involved. Thus, collective bearing of risks is
insurance.

MEDICLAIM INSURANCE

Definition
Insurance in its basic form is defined as A contract between two parties
whereby one party called insurer undertakes in exchange for a fixed sum
called premiums, to pay the other party called insured a fixed amount of
money on the happening of a certain event."
In simple terms it is a contract between the person who buys Insurance
and an Insurance company who sold the Policy. By entering into
contract the Insurance Company agrees to pay the Policy holder or his
family members a predetermined sum of money in case of any
unfortunate event for a predetermined fixed sum payable which is in
normal term called Insurance Premiums.

MEDICLAIM INSURANCE

TYPES OF INSURANCE
Life insurance
Life insurance is an insurance coverage that pays out a certain amount of
money to the insured pr their specified beneficiaries upon a certain event
such as death of the individual who is insured. This protection is also
offered in a family tactful plan, a Shariah based approach to protecting
you and your family. The coverage period for a life insurance is usually
more than a year. So this requires a periodic premium payment, either
monthly, quarterly or annually. The risks that are covered by life
insurance are:
Premature death
Income during retirement
Illness
The main products of life insurance include:
1. Whole life
2. Endowment
3. Term
4. Investment-linked
5. Life annuity plan
6. Medical and health

MEDICLAIM INSURANCE

General insurance
General insurance is basically an insurance policy that protects u against
looses and damages other than those covered by life insurance. For more
comprehensive coverage, it is vital for you to know about the risks
covered to ensure that you and your family are protected from
unforeseen losses.
The coverage period for most general insurance policies and
plans is usually one year, whereby premiums are normally paid on a
one-time basis.
The risks that are covered by general insurance are:
Property loss, for example, stolen car or burnt house
Liability arising from damage caused by yourself to a third party
Accidental death or injury
The main products of general insurance include:
Motor insurance
Fire insurance
Personal accident insurance
Medical and health insurance
Travel insurance

MEDICLAIM INSURANCE

HEALTH INSURANCE IN INDIA

The guiding principle enunciated in the Bhore committee of 1946, which
states that `no individual should fall to secure adequate medical care
because of inability to pay for it', looks unreachable even after 50 years
of Indian Independence. Some form of health insurance, either social or
private, covers hardly 3% of the Indian population. The total expenditure
on health in India is 6% of the GDP and the government spending is less
than 25% against the average spending of 30-40% another developing
countries.
In India, health insurance mainly exists in the form of Mediclaim policy
offered to the individuals or group, association or corporate bodies. State
owned insurance companies; covering only about 2.5 mn people of the
countrys population, do the penetration of Mediclaim policy. Social
insurance like Employee State Insurance Scheme is available but they
have restricted the coverage to a very small segment of the population
that is round 3%.
The government has taken serious interest in the potential of insurance
companies to provide and popularize health insurance coverage at
modest rate of premium. To achieve this goal the government has
allowed income tax rebates for premium paid for health insurance
policies.
GIC made some headway under its various health care plans for
different segments of policyholders, by covering more than 2 mn people.
LIC and Tails made attempt to offer some type of health insurance
covers. However, health insurance could not pick momentum in India
due to the following reasons:
1. Service costs are out of reach of many people.
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2. Lack of good and efficient physician and less number of hospitals.

3. High illiteracy rate
4. Poor medical equipment and
5. Poor budget allocation towards healthcare.
We shall now discuss in detail about the health insurance
policies available in India.

MEDICLAIM INSURANCE

DECADES OF MEDICLAIM
The concept of health insurance was proposed in 1694 by Hugh the
Elder Chamberlin from the Chamberlin family. In the late 19th century,
"accident insurance" began to be available, which operated much like
modern disability insurance. This payment model continued until the
start of the 20th century in some jurisdictions (like California), where all
laws regulating health insurance actually referred to disability insurance.
Before the development of medical expense insurance, patients were
expected to pay all other health care costs out of their own pockets,
under what is known as the fee business model. During the middle to
late 20th century, traditional disability insurance evolved into modern
health insurance programs. Today, most comprehensive private health
insurance programs cover the cost of routine, preventive, and emergency
health care procedures, and also most prescription drugs, but this was
not always the case.
Hospital and medical expense policies were introduced during the first
half of the20th century. During the 1920s, individual hospitals began
offering services to individuals on a pre-paid basis, eventually leading to
the development of BlueCross organizations. The predecessors of
today's Health Maintenance Organizations (HMOs) originated beginning
in 1929, through the 1930s and on during World War II.

MEDICLAIM INSURANCE

MEDICLAIM IN INDIA
In mid 80s most of the hospitals in India were governments owned and
treatment was free of cost. With the advent of Private Medical Care the
need for Health Insurance was felt and various Insurance Companies
(New India Assurance, National Insurance Company, Oriental Insurance
& United Insurance Company) introduced Mediclaim Insurance as a
product.
According to recent news report Health insurance continues to be the
fastest growing segment with annual growth rate of 55%. Health
Premium has risen to Rs.3300 cores in 2006-2007. As per the recent
reports from various agencies the Health sector has the potential to
become a Rs. 25000-crore industry by 2010.
On August 15, 2007 Prime Minister has announced Rs 2000 Cores for
Health Insurance for poor citizens. We foresee that this amount will be
partly in form of subsidy therefore during calendar year 2008 we can
expect Health Insurance premium to touch figure in the range of Rs
10,000 Cores.
In 2001 with entry of various private Insurance companies now the
customers have choice of buying this insurance from 14 Insurance
companies.

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The Companies, which offer Health or Mediclaim Insurance,

are;
Bajaj Allianz General Insurance Company Limited
Future Generali India Insurance Company Limited
HDFC General Insurance Company Ltd.
ICICI Lombard General Insurance Limited.
National Insurance Company Limited
New India Assurance Company Limited
Oriental Insurance Company Limited
Reliance General Insurance Company Limited
Royal Sundram Alliance Insurance Company Limited
Star health and Allied Insurance Company Limited
TATA AIG General Insurance Company Limited. (Overseas Health
Insurance only)
United India Insurance Company Limited

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India is the only country where hospitalization insurance policy was

being soldas Mediclaim Insurance Policies. The very name gives a
feeling to the insured that claim has to be lodged. If motor
insurance policy is not sold as motor insurance claim policy and
household insurance policy is not sold as household claim policy then
why this is named as Mediclaim?
In the recent years the trend has emerged that some Insurance
companies have started calling this product as Health Insurance.
Health Insurance and Mediclaim are two different names for the same
product. The change has started coming and now we have started
calling it Health Insurance.ICICI Lombard has even named it as
Health Insurance Policy.
Calling is as Health Insurance is a positive way of looking at this
Insurance. It also giving us a feeling that we as a society have started
moving from curative medical care to preventive medical care.
According to sources in Oriental insurance it is being felt that mindset
has started changing over the last couple of years The new middleclass of India aspires of q u a l i ty h e a l t h c a r e s e r v i c e a n d d o e s n t
m i n d g o i n g t o e x p e n s i v e h o s p i t a l s l i k e Ap o l l o o r E s c o r t s .
There is no reason why healthcare insurance should not
b e successful with this class.

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Principles of insurance
Indemnity
A contract of insurance contained in a fire, marine, burglary or any other
policy (except life assurance and personal accident and sickness
insurance) is a contract of indemnity. This means that the insured, in
case of loss against which the policy has been issued, shall be paid the
actual amount of loss not exceeding the amount of the policy, i.e. he
shall be fully indemnified. The object of every contract of insurance is to
place the insured in the same financial position, as nearly as possible,
after the loss, as if he loses had not taken place at all. It would be
against public policy to allow an insured to make a profit out of his loss
or damage.
Utmost Good Faith
Since insurance shifts risk from one party to another, it is essential that
there must be utmost good faith and mutual confidence between the
insured and the insurer. In a contract of insurance the insured knows
More about the subject matter of the contract than the insurer.
Consequently, heis duty bound to disclose accurately all material facts
and nothing should be withheld or concealed. Any fact is material, which
goes to the root of the contractor insurance and has a bearing on the risk
involved. It is only when the insurer knows the whole truth that he is in a
position to judge
(a)Whether he should accept the risk and
b) What premium he should charge.

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If that were so, the insured might be tempted to bring about the event
insured against in order to get money.
Insurable Interest
A contract of insurance affected without insurable interest is void. It
means that the insured must have an actual pecuniary interest and not a
mere anxiety or sentimental interest in the subject matter of the
insurance. The insured must be so situated with regard to the thing
insured that he would have benefit by its existence and loss from its
destruction. The owner of a ship run a risk of losing his ship, the
charterer of the ship runs a risk of losing his freight and the owner of the
cargo incurs the risk of losing his goods and profit. So, all these persons
have something at stake and all of them have insurable interest. It is the
existence of insurable interest in a contract of insurance, which
distinguishes it from a mere watering agreement.
Causa Proxima
The rule of causa proxima means that the cause of the loss must be
proximate or immediate and not remote. If the proximate cause of the
loss is a peril insured against, the insured can recover. When a loss has
been brought about by two or more causes, the question arises as to
which is the causa proxima, although the result could not have happened
without the remote cause. But if the loss is brought about by any cause
attributable to the misconduct of the insured, the insurer is not liable.
Risk
In a contract of insurance the insurer undertakes to protect the insured
from specified loss and the insurer receive a premium for running the
risk of such loss. Thus, risk must attach to a policy.

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Mitigation of Loss
In the event of some mishap to the insured property, the insured must
take all necessary steps to mitigate or minimize the loss, just as any
prudent person would do in those circumstances. If he does not do so,
the insurer can avoid the payment of loss attributable to his negligence.
But it must be remembered that though the insured is bound to do his
best for his insurer, he is, not bound to do so at the risk of his life.
Subrogation
The doctrine of subrogation is a corollary to the principle of indemnity
and applies only to fire and marine insurance. According to it, when an
insured has received full indemnity in respect of his loss, all rights and
remedies which he has against third person will pass on to the insurer
and will be exercised for his benefit until he (the insurer) recoups the
amount he has paid under the policy. It must be clarified here that the
insurer's right of subrogation arises only when he has paid for the loss
for which he is liable under the policy and this right extend only to the
rights and remedies available to the insured in respect of the thing to
which the contract of insurance relates.
Contribution
Where there are two or more insurance on one risk, the principle of
contribution comes into play. The aim of contribution is to distribute the
actual amount of loss among the different insurers who are liable for the
same risk under different policies in respect of the same subject matter.
Any one insurer may pay to the insured the full amount of the loss
covered by the policy and then become entitled to contribution from his
co-insurers in proportion to the amount which each has undertaken to
pay in case of loss of the same subject-matter.

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In other words, the right of contribution arises when

(I)There are different policies which relate to the same subject-matter
(II) The policies cover the same peril which caused the loss, and
(III) All the policies are in force at the time of the loss, and
(IV) One of the insurers has paid to the insured more than his share of
the loss.

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TYPES OF MEDICLAIM POLICIES

MEANING:
Policies under this insurance, the insurer undertakes to indemnity the
assured in consideration of certain payment, up to certain specified
amount insured against for loss arising in respect of hospitalization or
injury sustained by the insured person.
Due to rapid population growth and more and more use of contamination
of fond, water, and air etc., which leads to hospitalization are more
frequent. To cater to the varying and increasing needs, different forms of
cover are available.
Types of policies:
The following types of policies are issued by the insurance corporation
in order to meet the public at large:
I.

Mediclaim policy (Individual):

Coverage: the policy provides for the hospitalization/domiciliary

hospitalization expenses for illness/diseases or injuries sustained.
Expenses on hospitalization is payable when the insured is admitted in
the hospital for a minimum period of 24 hours. An individual can opt for
the sum insured ranging from Rs.15, 000 to Rs.5, 00,000 in multiples of
Rs.5, 000.
Eligibility: People in the between age group of 5 and 80 years are
eligible for the policy. Children between the ages of 3 months to 5 years
can be covered provided one or both parents opt mediclaim over.
Benefits:
Reimbursement of hospitalization/domiciliary hospitalization expenses
as mentioned above. Family discount- a discount of 10% in the
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total premium is available if the policyholder is opting cover under the

policy for anyone of the following: spouse, dependent children, and
dependent parents. Cost of health checkups- this cost is payable to the
insured at the end of every four year block provided there is no claim
reported during the block. The cost reimburse will be the amount equal
to 1% of the averages sum insured during the block. Premium of Rs.15,
000 is exempted under income tax section 80D, if paid bycheque.
Conditions:
Any event giving rise to claim under the policy should be informed
or communicated to the insurance company in writing within 7 days
from the date of injury, hospitalization/ domiciliary hospitalization.
Claim must be filed within 30 days from the date of discharge from the
hospital.
The company will not be liable for any payment for claim, which are
fraudulent or supported by any fraudulent device.
II. Group medical policy:
The group medical policy will be available to pay or association,
institution or corporate body of more than 50 persons provided it has
central administration point. Each insurer should cover all eligible
candidates under one group policy only which means that different
categories of eligible members are not allowed to be covered under
different group Medicalim policies.
The group discount is permissible depending upon the total number
of insured person covered under the group mediclaim policy at the
inception of the policy. It is to be noted that no discount is offered to a
group with less than 101 members.
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III. Overseas Mediclaim policy:

Overseas Mediclaim policy was originally introduced in 1984 to
provide payment of medical expenses incurred in respect of illness
suffered or sustained by Indian resident during their overseas trips. The
insurance scheme, since 1984 has been modified several times to
provide for additional benefits like in-fight personal accident, loss of
passport etc. in the year 1991, employment of study policy was
introduced for Indian citizens temporarily living abroad.
There are two type of plan under overseas mediclaim policy:
Standard cover.
Videsh yatra mitra.
Eligibility:
The policy is available to the following person: Indian residents
traveling abroad for the following purposes:
Business
Official
Holiday tour
Professional Training
Accompanying spouse and children of the person going aboard will be
treated as going under holiday travel.
Age limit:
Adults: the age limit is 70 years. Adults between the age of 70 and 80
years can be covered at the discretion of the insurer by loading the

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premium and persons above 80, years can also be covered provided the
insurance company's head office accepts the proposal.
Benefits:
The following are the important benefits of overseas medical policy:
Reimbursements of medical expenses of the insured during his/her stay
abroad.
Automatic extension of insurance period.
In the event of claim, services will be provided by M/s. Mercury
international assistance and claims limited, whose services are available
all over the world.
If the insured is required to be sent back, to the home country on
account of sickness suffered or injury sustained, the expenses incurred
therewith are also paid.
An amount up to $225 for immediate relief of dental plan is
also payable with the approval of M/s. Mercury.
All the expenses are reimbursed in the local currency of the country

IV.Jan Arogya Bima Policy:

The coverage under this policy can be considered, to a certain extent,
along the lines of individual mediclaim policy expect that cumulative
bonus and mediclaim check up benefits are not included. The above plan
covers the risks or reimbursement in respect of hospitalization and
domiciliary hospitalization up to Rs.5000 per person per annum. The

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salient feature of the scheme is granted only for the benefits of the
lower income of society and common masses.
V. Cancer policy
: This policy is designed to meet the risks or coverage for the members
of the cancer patient aid association. There are two schemes available
for cancer policy:
a. Indian cancer society
b. Cancer Patients Aid Association.
This policy is introduced in collaboration with Indian Cancer
Society can avail of the benefits of this scheme. The policy lapses
immediately if the insured ceases to be a member of the Cancer society
for any reason whatsoever. On payment of the prescribed membership
fees, which is included in insurance premium during the currency of the
policy suffers from cancer; the policy will pay up toRs. 50, 000 to meet
the cost of diagnosis, biopsy, chemotherapy, hospitalization and
rehabilitation.
VI. Bhavishya Arogya Policy
: This scheme had been designed so as to enable a person to provide
himself for medical needs during an old age security. Under this policy
the medical expenses to be incurred over the balance life span after a
predetermined age of retirement will be reimbursed up to the amount of
the sum insured with a limit of an amount per any one illness or injury.
The amount of maximum total benefits available under the basic policy
is Rs. 50, 000 during the lifetime of the insured commencing from the
policy retirement age and is not to exceed Rs. 20, 000.

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VII. Videsh Yatra Mitra Policy:

Videsh yatra policy is another overseas mediclaim scheme introduced by
general Insurance Corporation with effect from1998. This policy
provides the widest cover of personal accident, loss of checked baggage,
loss of passport, medical expenses and repatriation, delay of
checked baggage, personal liability etc. insured person is that person
named in the overseas policy schedule, for which the appropriate
premium had been paid. The policy is valued only from the first day of
insurance and expires on the last day of the number of days specified in
the policy schedule or on return to India whichever is

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MAJOR MEDICAL INSURANCE A NEW TYPE

OFINDIVIDUAL HEALTH INSURANCE
Major medical insurance is designed to pay a high proportion of the
covered expenses of a catastrophic illness or injury. This type of plans is
often sold in conjunction with a hospitalization and surgical plan, and is
aimed at covering costs that a normal hospitalization plan does not
cover. Most such plans include the following characteristics:
1. Extensive coverage:
Usually the major medical insurance coverage is wide and includes all
the reasonable and essential medical expenses and other related expenses
from a covered illness or injury.
2. Generous Maximum Limits:
Many of such plans offered overseas have generous lifetime limits
ranging from$300,000 to a million or even more. Locally, the limits
offered are often less, but still considered high relative to the cost of
major illness treatments. A high limit is necessary because the purpose
of having such plans is to cover catastrophic losses that a normal
hospitalization plan does not cover.
3. Benefit Period:
A benefit period is the length of time that the plans benefits will be
paid after the deductible is satisfied. At the end of the benefit period, the
insured has to satisfy afresh deductible in order to establish a new
benefit period. The purpose of the benefit period is to grant a definite
period within qualified medical expenses for a particular disease or
injury must be incurred in order to reimburse under the policy.

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4. Deductible:
Deductible are the stated amounts each claim has to satisfy before
any payments of the benefits are made. The purpose od deductibles is to
eliminate small claims that a pose a relatively high processing cost to
insures. This will help insurers keep the premiums for major medical
plans reasonable.
5. Co-Insurance:
A co-insurance is a policy provision that requires the insured to pay
a certain percentage of the eligible medical expenses in excess of the
deductible. The purpose of this clause is to reduce premium and
prevent over utilization of policy benefits. Since the insured has to
pay part of the bill, premiums can be offered at cheaper rates. Another
purpose of the provision is to discourage the patients from simply
choosing the most costly medical services while lower-cost versions
are available and are just as good.
6. Exclusions :
Like all types of insurance policies, major medical plans contain
exclusion clauses. Some of the common exclusions that are found in
such plans are as follows:
Expanses incurred as a result of war or military conflict.
Optional cosmetic surgery.
Normal dental care.
Pregnancy and childbirth, except for complication that arises as a result
of childbirth.
Experimental surgery

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To further control cost, internal limits are sometimes imposed on the

plan. There may be in the form of annual or lifetime limits on the
amount paid for certain diseases.

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Different policy offered by companies

The New India Assurance Co Ltd
Who can take this policy
This insurance is available to persons between the age of 18 years to 60
years. Children between the ages of 3 months to 18 years can be covered
provided parents are covered simultaneously. The persons beyond 60
years can continue their insurance provided they are insured under
Mediclaim policy with our Company without any break.
What does this policy cover?
The policy covers hospitalization expenses for the treatment of
illness/injury provided hospitalizations is more than 24 hours. Prehospitalization expenses for 30 days and post hospitalization expenses
for 60 days are also payable.
Day-care treatment - The Medical expense towards specific
technologically advanced day-care treatments / surgeries where 24 hour
hospitalization is not required.
Ambulance Charges for shifting the insured from residence to hospital
are covered up to the limits specified in the policy.
Ayurvedic / Homeopathic and Unani system of medicine are covered to
the extent of 25% of Sum Insured provided the treatment is taken in the
Government Hospital.
Pre-existing diseases are covered only after 4 continuous and claim free
renewals with our Company.Pre-existing conditions like Hypertension,

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Diabetes, and their complications are covered after two years of

continuous insurance on payment of additional premium.
Exclusions:
Diseases contracted within 30 days of insurance
Dental treatment except arising out of accident.
Debility and General Run down Conditions.
Sexually transmitted diseases and HIV (AIDS)
Circumcision, Cosmetic surgery, Plastic surgery unless required to treat
injury or illness
Vaccination and Inoculation
Pregnancy and child birth
War, Act of foreign enemy, ionizing radiation and nuclear weapon.
Treatment outside India
Naturopathy
Domiciliary Treatment
Experimental or unproven treatment
All external equipments such as contact lenses, cochlear implants etc

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Premium:
Premium is based on age of the proposer and geographical area of
treatment.
Special features of the policy:
Discount in premium for family cover
Loyalty Discount
Good Health Discount
Cumulative Bonus
Cost of Health Check up
Income Tax Benefit under Section 80D of IT Act.

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National Insurance
. Salient Feature
Hospitalization for illness,
Disease
Accident, including surgery
2. Scope of Cover
Mediclaim insurance policy has been devised under the aegis of the
Government of India.
The policy provides the following benefits.
1) Reimbursement of hospitalization expenses which are reasonably and
necessarily incurred,
Under the following heads:
a) Room, boarding expenses as provided by the hospital/nursing home.
b) Nursing expenses.
c) Fees of surgeon, anesthetist, medical practitioner, consultant and
specialist.
d) Expenses on account of anesthesia, blood, oxygen, operation theatre
charges, surgical Appliances, medicines and drugs, diagnostic material,
X-ray, dialysis, chemotherapy, Radiotherapy cost of pacemaker,
artificial limbs and cost of organs and similar expenses.
2) Introduction of Sub-Limits:
The following provisions have been introduced:

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A. Room, Board and Nursing Expenses as provided by the Hospital

/Nursing Home- Room Rent limit: 1 % of the Sum Insured per day
subject to maximum of Rs.5000./-. I.C. Unit Expenses: 2 % of Sum
Insured per day subject tomaximum of Rs. 10,000/-. Over all limits
under this head: 25% of S.I. per illness.
B. Surgeon, Anesthetist, Medical Practitioner, Consultants Special fees
maximum limits per Illness 25% of S.I.
C.Anesthesia, Blood, Oxygen, OT charges, Surgical appliance,
Medicines, drugs,Diagnostic Material & X-Ray, Dialysis,
Chemotherapy, Radiotherapy, cost of pacemaker, artificial limbs And
cost of stint and implant. Maximum limit per illness 50% of Sum
Insured.
D. Ambulance services - 1% of the sum insured subject to maximum of
Rs 1000/- provided Registered ambulance is used for shifting patient
from residence tohospital if admitted to ICU or emergency ward OR
from one hospital to another subject to sub-limits under c above
E. Hospitalization expenses of person donating an organ during the
course of organ transplant Will also be payable subject to the sub-limits
under c above.
3) Premium paid for the policy towards self, spouse, dependent children
anddependent parents are exempt from Income Tax under Sec. 80D of
the l.T. Act.
4) Cost of Health Check Up and Cumulative Bonus - Benefits will
accrue only if the Policy is a renewal
Of National.

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3. Additional Features
1) Definition of Family:
A) Self (Primary Insured).
B) Spouse.
C) Dependent Children (i.e. legitimate or legally adopted children).
Children above 18 years, if employed, can not be covered. Male
children, if not employed, but a bonafide student can be covered up to
age of 25 years. Female children, if not employed, can be covered until
the time she is married.
D) Dependent parents. All members of the family must be covered under
one policy.
2) Entry Age:
This insurance is available to a person between the age of 18 to 59
years. However, the Policy can be renewed upto the age of 80 years as
stipulated in the premium chart above.
a) Children above the age of 3 months can be covered provided parents
are covered concurrently and suitable premium is paid. If the child
above 18 years is employed or if the Girl child is married, he or she shall
cease to be covered under the policy. However male child can be
covered up to the age of 25 years if he is a bonafide regular student and
fully dependent on primary insured. Female child can be covered up to
the time, she is unmarried.
b) If the insured has taken continuous Mediclaim insurance policy with
us for at least 5 years prior to attaining the age of 80 years the policy can
be renewed beyond the age of 80 up to the age of 90 years as a special
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MEDICLAIM INSURANCE

case with the approval of Regional In charge on case to case basis. The
premium chargeable shall be 10%of the premium for 75-80 years age
slabs for proposers above 85 and 20% of the premium for 75-80 age
slabs for proposers above 90.
c) No inclusion of family member during currency of policy is
permissible except for a new born child between the age of 3 months to
6 months and newly married spouse within 60 days of marriage.
Otherwise inclusion of family member shall be allowed only at the time
of Renewal. Prorata premium shall be charged for such inclusion during
the currency of the policy for the unexpired period.
3) Sum Insured:Minimum sum insured shall be Rs 50,000/- and can be
increased in multiples of Rs25,000/-upto Rs 5 lacs. The sum insured
must be identical for primary insured andthe dependents. However, the
children may be covered for 50% Sum Insured as per item no. 2 above.
4)TPA option:The premium includes cashless facility through TPA. If
the policyholder does notrequire cashless facility then 6% discount on
premium may be given.
5) Pre -Acceptance Health Checkup:Pre acceptance health check-up is
mandatory when age is 50 years and above andhe/she is seeking
insurance cover for the first time as an individual or as member of a
family where there is break in Insurance increase in sum insured on
renewal.
Propose/Insured Person will be required to undergo the following
Medical Check-up or any other medical test as required by the Company
either on his/her own or from its authorized Network Diagnostic Centre
in prescribed format. The cost shall be borne by the insured.

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MEDICLAIM INSURANCE

Age

(in years)

50 and above
PHYSICAL EXAMINATION
BLOOD
URINE SUGAR
BLOODPRESSURE
ECHO
CARDIOGRAPHY
EYE CHECK UP
CHECKUP

MEDICAL TEST

INCLUDING

RETINOSCOPY

If the insured was covered under any Health Insurance Policy of

National uninterruptedly for
Preceding 3 years, no pre-acceptance Medical check up is required.

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MEDICLAIM INSURANCE

4. Exclusions
The most important exclusion relates to pre-existing illness. If the insuring person
had a health condition, existing prior to taking the policy, which required medical
treatment, the same gets automatically excluded in the policy. To ensure that in
subsequent renewals medical conditions.
Incepting since the policy was taken do not get excluded, the insuring person must
renew the policy without break. The other exclusions for illustrative purposes are:a) Exclusion of certain named diseases in the first year of the policy.
b) Congenital external disease, sterility, venereal disease, intentional self-injury,
use of drugs, Alcohol, rest cure etc.
c) AIDS
d) Charges primarily for diagnostic, laboratory examinations, and not related to
any treatment in hospital. So also for vitamins and tonics unless prescribed
for treatment.
e) Dental treatment not requiring hospitalization.
f) Treatment arising from or traceable to pregnancy, childbirth, including
caesarean.
g) Naturopathy treatment.
EXCLUSION 4.a, 4.b & 4.c have been amended . Pre-existing diseases shall be
covered after 4 continuous claims free Policy years with National. However,
incase of exclusion 4.3, for renewals, Existing condition shall apply, i.e. the one
year exclusion applicable earlier shall be valid

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MEDICLAIM INSURANCE

BENEFITS OF MEDICLAIM

Benefits of a Mediclaim policy are many. Some of which are

listed below.
1) First and foremost the Mediclaim policy offers you a chance to get your
medical expenses covered under a policy. Thus it takes care of the
hospitalization fees. Protects the person or family (in case of family plan) for
hospitalization expenses as a result of any specific injury or illness which has
taken place during the period of insurance and on the advice of a doctor
requires hospitalization.
2) Pre hospitalization expenses for the person or the insurer and also to go with it
Post-Hospitalization Expenses:
Post Hospitalization expenses are medical expensesincurred during a period up to a
specific number of days after hospitalization for the particular ailment disease or
injury is over but still needs expenditures in order to completely become normal.
3) If you have a health insurance policy that supports cashless Mediclaim, it means
that you can get medical treatment just by displaying your insurance card
without paying any cash to the hospital. Most health insurance companies offer this
benefit. Some times the benefits may be applicable only to a certain number of
hospitals or medical centers.
4) Some of the insurance policies also provide tax benefits. These tax benefits
are provided to the person under the name of whom the insurance policy has been
assigned. Under the Section 80D, tax benefits are provided to people who get a
Mediclaim policy done in their n

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MEDICLAIM INSURANCE

WIDER HEALTH COVER FOR POOR

New Delhi: With assembly elections in six states and general elections just months
a w a y, t h e g o v e r n m e n t i s p l a n n i n g t o e x p a n d t h e s c o p e o f i t s
h e a l t h i n s u r a n c e schemes for the poor. At a marginal premium, families above
poverty line (ALP)c o u l d a l s o g e t t h e b e n e f i t o f i n s u r a n c e
c o v e r i f t h e p r o p o s a l g o e s t h r o u g h . The health ministry is planning
to modify the scope of its yet-to take-off Rs 8,000-crore National Urban Health
Mission (NUHM) for the urban poor to cover services like outpatient care, which
are not covered by the Rashtriya Swasthya Bima Yojana(RSBY). Health secretary
Naresh Dayal told ET that his ministry was exploring the o p t i o n o f m o d i f y i n g
the proposed insurance scheme under NUHM so that the urban
poor can get additional benefits. The government is also
examining the p o s s i b i l i t y o f r a i s i n g t h e c o v e r f r o m R s
3 0 , 0 0 0 i n i t i a l l y p r o p o s e d . T h e s e suggestions came up at a
meeting of senior government officials last week. APL families are not
covered under RSBY. NUHM was announced in March this year by
health minister Anbumani Ramadoss and was to be launched in four
months. However, in April, the labour ministry operationalised RSBY
announced last year for workers in the unorganized sector. Now, the health
ministry, which was all set to kick start NUHM on the lines of the National
Rural Health Mission, is thinking of re-designing the insurance component of
this ambitious programmed.We are looking at a variety of options. We may
either launch the programmed with better reach and coverage or will
modify it and cover those areas that have been left out by the labor ministry.
Once things get finalized, we will take it to the Cabinet for approval. All this may
take 3-4 months, Mr Dayal told ET.

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MEDICLAIM INSURANCE

DATABASE OF MEDICLAIM INSURANCE

General Insurance Corporation through its four subsidiaries: Oriental
Insurance, N e w I n d i a As s u r a n c e , N a t i o n a l Insurance Company ,
United India Insurance.
Age:
Between 5 - 80 years. C h i l d r e n b e t w e e n 3 m o n t h s a n d 5 y e a r s c a n b e
c o v e r e d p r o v i d e d o n e o r b o t h parents are also covered.
Coverage:
Insures against any hospitalization expenses that may arise in future. The scheme
reimburses hospitalization expenses for illness, diseases
o r injury sustained, excludes any disease existing before taking the policy.
Cost:
Sum insured can be anywhere between Rs 15,000 - Rs 500,000. Rate of premium
ranges between Rs 175 per year to Rs 2,500 per year depending on the
age and capital sum insured.
Amount:
Compensation up to the extent of sum insured.

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MEDICLAIM INSURANCE

DOCUMENTS REQUIRED
Given below is a general list of documents that are required in case of a claim.
1. Duly completed claim form (available with all network hospitals).
2. Original bills, receipts and discharge certificate / card from the hospital.
3. Bills from chemists supported by proper prescription
4. Investigation test reports and payment receipts, supported by the note from
attending medical practitioner / surgeon prescribing the test.
5. Doctors referral letter advising hospitalization in non-accidental cases.
6. Nature of operation performed and surgeons bill and receipt.
7.Any other documentation / information as required by the Service
Provider/TPA.

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MEDICLAIM INSURANCE

MEDICLAIM RENEWAL BY INSURERS MUST

BEAUTOMATIC, RULES BY SUPREMECOURT
The Supreme Court has ruled that insurance companies are obliged to renew the
mediclaim policy automatically unless otherwise mutually agreed between
insurer and insured.
A bench comprising Justice SB Sinha and Justice VS Sirpurkar also asked
theregulator (Irda) to lay down guidelines to check the imposition of arbitrary
clausesof mediclaim policy and its renewal. The court said, Renewal of a
mediclaim policy subject to just exceptions should ordinarily be made.
But where a renewal is based on mutual consent, there may be
n o a u t o m a t i c renewal. A mediclaim policy in which a senior citizen is involved
would stand on a different footing. It will depend upon the contract entered into
between the parties and the statutes operating in the field as also the constitutional
scheme, court said.
It rejected the plea of some public sector insurance companies, which had said that
wherever renewal is subject to mutual consent of the parties, it
m i g h t b e a t i t s whims and caprice to refuse the renewal of the policy.
The insurance companies cannot, either in their prospectus or
i n t h e t e r m s o f p o l i c y, l a y d o w n a n y c o n d i t i o n w h i c h w o u l d b e
d e r o g a t o r y t o t h e t e r m s a n d conditions approved by the regulatory
authority. If the contract of insurance itself p r o v i d e s f o r r e n e w a l o f a n
i n s u r a n c e p o l i c y t h e s a m e m a y n o t m e a n t h a t t h e assured has a legal
right of automatic renewal, but the courts are required to strike
A balance said Justice Sinha writing the verdict. The court asked the
authorities concerned to lay down guidelines in this regard. We would like to
observe that keeping in view the role played by the insurance
companies, it is essential that the regulatory authority
m u s t l a y d o w n c l e a r guidelines by way of regulations or otherwise. No
doubt, the regulations would be applicable to all the players in the field... the
court said. The duties and functionso f t h e r e g u l a t o r y a u t h o r i t y, h o w e v e r ,
a r e t o s e e t h a t t h e s e r v i c e p r o v i d e r m u s t render their services keeping
in view the nature thereof. It will be appropriate if thec e n t r a l g o v e r n m e n t
39

MEDICLAIM INSURANCE

or the general insurance companies also issue

r e q u i s i t e circulars, the court said. It further said, We would request

the IRDA to consider the matter in depth andu n d e r t a k e a

scrutiny of such claims so that in the event it is
f o u n d t h a t t h e insurance companies are taking recourse to arbitrary
methodologies in the matter of entering into contracts of insurance
or renewal thereof, appropriate steps on that behalf may be taken.

CASHLESS CLAIM PROCEDURE

When should you claim?

40

MEDICLAIM INSURANCE

There are a host of benefits for having a claim-free policy, the

most important b e i n g a d d i t i o n a l c o v e r a t t h e s a m e
p r e m i u m , b u t t h e w h o l e p u r p o s e o f h e a l t h insurance is to
provide for your medical expenses. However, you must make
your claims prudently. So, you should not make small claims. To choose
which claims are worth making, get the numbers right! Check if by
making a claim, the no-claim b o n u s y o u f o r f e i t a n d t h e 1 0 p e r
c e n t o f c u m u l a t i v e b o n u s c o v e r y o u l o s e w i l l exceed the
compensation you get. If it does, it makes sense not to make a claim
but pay for the expenses you? Claim only if the amount is on the higher
side and you it makes sense to forfeit the no claim bonus. Also keep in
mind that in the long term, it will reflect on your records and will
the insurer will penalize you with an extra load on your premiums.

How would you claim?

1.S e l e c t a h o s p i t a l f r o m y o u r s e r v i c e p r o v i d e r ' s n e t w o r k
h o s p i t a l t i e - u p s . Check the Network Hospitals booklet mailed
to you or visits your service provider's website. However, do note
that the hospital booklet might not be updated. Your provider may
include or exclude hospitals without giving prior information. It is
advisable to check the updated list from the website or
contact them directly for information.
2. P r o d u c e y o u r c a s h l e s s c a r d i n t h e c h o s e n h o s p i t a l
Prior hospitalization.
3.Fill in the Pre-authorization form with the insurance details.
The hospital shall fill in information regarding the diagnosis, treatment
plan, past history and the expected of the cost of treatment. The preauthorization form can be availed at the hospital or downloaded
from the service provider's website.

41

MEDICLAIM INSURANCE

4.The hospital shall then fax the signed and stamped form to the
service provider.
5.The service provider then evaluates the documents and classifies the
case as A p p r o v e d , Q u e r i e d o r R e j e c t e d . Ac c o r d i n g l y, t h e
Authorization form would be faxed to the hospital.
6.It is advisable to follow the above procedure and get the Authorization
Letter before getting admitted to avoid any disappointments. However,
in case of an Emergency Hospitalization, the authorization form can be
obtained after admission.
7.Note that the Cashless Authorization does not cover: Attendant/Visitor
pass charges
Ambulance chargesunless covered under the policy
Special nursing charges not authorized by the attending doctor
Charges for extra bed for attendant
Purchase of Medicines not related to the treatment

Claims some important notes

42

MEDICLAIM INSURANCE

Telephone/Fax charges. Claims must be authorized by us before you go

ahead with treatment. This can be done by calling Customer Support
on0300 123 3200. By doing so you can go ahead with the
treatment, safe in the knowledge that you are covered
Emergency treatment is not covered. Once your condition
has been stabilized and if your consultant agrees, you can be
transferred (with our prior approval) to private facilities or become a
private patient within the NHS
Claims will not be paid if your premiums are not up to date
All claims made in the first year of the policy will be referred toour
Chief Medical Officer
Additional information may be required from your GP at the
time of claim
I f a c l a i m c a n b e p a i d u n d e r a n o t h e r i n s u r a n c e p o l i c y o r
b y anyone else, we will only pay the proper share.

The main reasons for claim not being passed in full are
I n s u r e d h a s p r e e x i s t i n g d i s e a s e a n d i t w a s a l r e a dy
m e n t i o n e d i n p o l i cy document as exclusion.
The specific diseases are not covered under the policy
Disease is a preexisting disease and it was not revealed by the insured
at the time of issue of policy.
The main reasons for claim being passed in part are :

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MEDICLAIM INSURANCE

Some of the tests conducted/treatment were not relevant to the disease

for which patient was admitted.
Some costs like consumables are not payable by the insurance
company. Examples are :With a view to cover some of these payments some TPA's insist that 5%
of the hospital bill will be paid by the patient. You should not be
surprised if you are asked to pay 5% of the bill even if you are covered
under cashless scheme. In the event of consumables are not 5% or more
than 5% there is good possibility that you may get part of this paid to
you at time of finalization of their claim.
As a customer you should see that information being given at time
of admission into the hospital, discharge certificate, claim form is
consistent. Any follow up letter being sent to the insurance company
should be well drafted and consistent to the claim lodged.

NEED FOR MEDICLAIM INSURANCE

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MEDICLAIM INSURANCE

You are expected to live longer than your parents or

grandparents. An average Indian used to live for barely 40 years
at the time of Independence. By 2016, an average Indian would
live for about 68 or 70 years.
Life can come at you fast. It's simply impossible to know what's around
the corner. This is why we all have to take necessary precautions. In
other words; do you have health insurance? Some people actually
have no medical insurance whatsoever. This is completely absurd in
the unpredictable world we live in. That random fall or dreadful car
accident could happen today. Are you prepared to grapple with
those hospital bills? The fact is, medical insurance is just an
inevitability of life. You always want to have it just in case. If
the time does arise when you need it, you will thank God you
planned ahead.
However, a longer life need not mean healthier life. Lifestyle-related
diseases such as high blood pressure, diabetes, obesity, and
extraordinary stress are all on the rise. In short, we are looking at a
combination of longer but possibly a less healthy life span. At the same
time, healthcare costs have been escalating rapidly.
Landing up in hospital is the last thing we want to think
a b o u t . I t h a p p e n s t o someone else not meyou think. But we all
go through tough times and only the o n e s t h a t p l a n a h e a d c o m e
o u t u n s c a t h e d . Th e m a s s i v e c o s t o f t r e a t m e n t i s a doublewhammy for many who already have to contend with the illness. If you
become seriously ill, your entire wealth accumulated over decades can
disappear in combating the illness. If your savings can vanish in the
blink of the eye what is the best solution? The answer to this ominous
question is opting for health insurance.

WHY MEDICLAIM INSURANCE IS A MUST (Example)

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MEDICLAIM INSURANCE

I heard a story recently from an acquaintance of

m i n e w h o h a s n o m e d i c a l insurance. She never expected to use
such a thing. Sure, maybe dental on occasion, b u t n e v e r m e d i c a l . I
mean come on, the girl's only 23 years old. What could
h a p p e n ? Wel l , t h i s i s w h a t h a p p e n e d . S h e m a n a g e s a
t r u c k s t o p , a n d w h i l e conversing with an employee one
n i g h t , a b r u t e s t r o l l s i n w i t h a n a s ty t e m p e r. Before she
knew it, the employee she was conversing with is being attacked by
the brute. Now, when she decided to intervene and be the hero, she was
stabbed in the s h o u l d e r. Wow, w h a t a r e a l i t y c h e c k . You t r y
a n d d o t h e r i g h t t h i n g , a n d l i f e smacks you in the face. Now
comes the problem with having no medical insurance. After being
hospitalized for a couple weeks, her medical bills are now
around 30g r a n d . H o w e v e r, t h i s i s n o t t h e e n d o f i t . S h e
s t i l l h a s t o g o t h r o u g h p h y s i c a l therapy; not to mention the
mental anguish of almost dying. How much will the psychiatrist
charge? The point is, you simply can't know what's in store for
you. Life is so random for us all. I wanted to use this girl's
recent story as an example because it's true. Sure it's sad, but still
reality.
T h e s e d ay s , n o m e d i c a l i n s u r a n c e e q u a l s t r o u b l e d o w n
t h e r o a d . E v e n a m i n o r hospitalization can set you back for a
long while. The problem is that most of us d o n t b e l i e v e t h a t
we will ever use it. Get rid of your fantasies and
p u r c h a s e d ecent medical insurance plan today. Don't end up in the
emergency room with nonmedical insurance. If nothing else, insurance
offers you piece of mind. Although I have not used my medical
insurance yet, I understand I may need it in the future. I choose to be
prepared for what lies ahead.

PRECAUTIONARY MEASURES TO BE TAKEN

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MEDICLAIM INSURANCE

The following must first take root,

Judicial reforms that clearly link compensation along with avoidable
errors.
Government support for a nationwide response to medical error costs.
Development of initiatives by health insurance firms to reduce the
number of avoidable errors.
State and local support for further uniformity in model regulations and
rules.

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MEDICLAIM INSURANCE

I R D A M AY E N S U R E AF F O R D A B L E H E A LTH
C O V E R TO ALL, EVEN AFTER 65 YEARS
Hyderabad: Senior citizens have good chances of getting a health cover
even after they turn 65. Insurance regulator IRDA is vetting a proposal
to make health cover affordable to all senior citizens. A final view will
be taken on providing guaranteed access to health insurance for this
segment by the end of this year, said a top official of the regulatory
body. The proposal is based on the recommendations of an expert panel
on health insurance last year. The panel recommended allowing senior
citizens to enter the health insurance system up to 65 years of age
or higher at the discretion of the insurer.
If they do so, they should be given guaranteed renewal of their insurance
without any upper age limit. As a transitional measure since
guaranteed access is being provided to senior citizens for the first time
there should be no upper age limit for entry or renewal for a period of
three years from the date the IRDA issues the regulations, the panel had
said. It had made out a case for insurers to fix a base price of Rs 3,000
every year for a sum insured of Rs 1,00,000 (at 50 years). Weare
examining these recommendations of the panel we reckon that health
insurance should be made affordable, given the mounting health carecosts, said DVS Sastry, director general, IRDA at a seminar on effective
cross selling of insurance and mutual fund products organized by
Watson Wyatt and the Indian Institute of Banking and Finance here.
Several senior citizens have registered complaints withthe regulator
about insurance companies denying renewals. Industry experts, however,
reckon that people should enter health insurance schemes at an early age
to enable insurance companies distribute their risks better. Currently,
health insurance penetration is minuscule in India. The total premium
from health insurance stood at Rs 4,970 crore in FY 08, marking a 55%
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MEDICLAIM INSURANCE

growth over FY07.Currently, there are only two standalone health Star
Health and Allied Insurance and Apollo DKV offering pure health
products. The government is looking at raising the cap on foreign direct
investment (FDI) in insurance from 26% to 49%. It is also considering a
minimum capital requirement of Rs 50 crore for health insurance
companies to make it attractive for new-entrants. Consumers are
expected to get a better deal in terms of pricing when competition
intensifies among these players.

Deduction U/s 80D for mediclaim premium available to

individualHUF and senior citizen
Deduction in respect of Medical Insurance Premium
(Mediclaim) paid to keep in force insurance by individual either
on his own health or on the health of spouse,d e p e n d e n t
parents and children or HUF on the health of any
m e m b e r s o f t h e family. A Mediclaim policy is a must because should
you fall sick or meet with an accident, your medical bills could wipe out
your savings.
Features of Mediclaim policy
1. Premium based on Age:- As in term insurance, the premium
rates will vary among the insurers and will also depend on your
age. The older you are, the heftier the premium. For instance,
Mediclaim policy from General Insurance Corporation has a fixed
premium till 35 years and then it changes in 10-year slabs.

2. Who is it available to?

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MEDICLAIM INSURANCE

Individual (resident or non resident, Indian Citizen or foreign

citizen):- Incase an individual is taking the deduction, the medical
insurance policy can be taken in the name of any of the following:
the taxpayer or the spouse, parents or dependent children* of the
taxpayer.
HUF(Hindu undivided Family may be resident or non resident) :- In
case a HUF is taking the deduction, the medical insurance policy
can be taken in the name of any member of the family.

Note
Dependent Children (i.e. legitimate or legally adopted children).
Children above 18 years, if employed, can not be covered. Male
children, if not employed, but a bonafide student can be covered up to
age of 25 years. Female children, if not employed, can be
covered until the time she is married.
Parents need bot be dependent on the Assesses.
Parents of Individual or Spouse both are covered.
3. Entry Age: This insurance is available to a person between the age
of 18 to 59years. However, the Policy can be renewed up to the age
of 80 years.
a) Children above the age of 3 months can be covered provided parents
are covered concurrently and suitable premium is paid. If the child
above 18 years is employed or if the girl child is married, he or she
shall cease to be covered under the policy. However male child
can be covered up to the age of 25 years if he is a bonafide
r e g u l a r s t u d e n t a n d f u l ly d e p e n d e n t o n p r i m a ry
i n s u r e d . F e m a l e c h i l d c a n b e covered up to the time, she is
unmarried.

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MEDICLAIM INSURANCE

b) If the insured has taken continuous Mediclaim insurance

policy with us for at l e a s t 5 y e a r s p r i o r t o a t t a i n i n g t h e
a g e o f 8 0 y e a r s t h e p o l i c y c a n b e r e n e w e d beyond the age
of 80 up to the age of 90 years as a special case with the approval of
Regional In charge on case to case basis. The premium chargeable
shall be 10%of the premium for 75-80 years age slabs for proposers
above 85 and 20% of the premium for 75-80 age slabs for proposers
above 90.
c) No inclusion of family member during currency of policy is
permissible except for a new born child between the ages of 3
months to 6 months and newly married spouse within 60 days of
marriage. Otherwise inclusion of family member shall be allowed
only at the time of renewal. Pro rata premium shall be
charged for such inclusion during the currency of the policy for
the unexpired period.

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MEDICLAIM INSURANCE

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MEDICLAIM INSURANCE

Basic deduction: Mediclaim premium paid for Self, Spouse or dependant

children. Maximum deduction Rs 15,000. In case any of the persons
specified above is a senior citizen (i.e. 65 years or more as of end of the
year) and Mediclaim Insurance premium is paid for such senior citizen,
deduction amount is enhanced to Rs. 20,000.
Additional deduction: Mediclaim premium paid for parents. Maximum
deduction Rs 15,000. In case any of the parents covered by the
Mediclaim policy is a senior citizen, deduction amount is enhanced to
Rs. 20,000.
For HUF
Mediclaim premium paid for any member of the HUF. Maximum
deductions 15,000. In case any member of the HUF covered by the
Mediclaim policy is a senior citizen, deduction amount is enhanced to
Rs. 20,000.Senior citizen: means who is at least of 65 year of age or
more at any time during the previous year.

EXAMPLE- 1
1. An individual assesses pays (through any mode other than cash)
during the previous year medical insurance premium out of his taxable
income, as under:
(i) Rs 12,000/- to keep in force an insurance policy on his health and on
the health of his wife and dependent children;
(ii) Rs 17,000/- to keep in force an insurance policy on the health of his
parents.
Under the new provisions he will be allowed a deduction of Rs 27,000/(Rs. 12,000/- + Rs. 15,000/-) if neither of his parents is a senior citizen.
However ,if any of his parents is a senior citizen, he will be allowed a
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MEDICLAIM INSURANCE

deduction of Rs29,000/- (Rs.12,000/- + Rs.17,000/). Whether the parents

are dependent or not, is not a consideration for deciding the deduction
under the new provisions.
Further, in the above example, if cost of insurance on the health of the
parents is Rs30,000/-, out of which Rs 17,000/- is paid (by any non-cash
mode) by the son and Rs 13,000/- by the father ( who is a senior citizen),
out of their respective taxable income, the son will get a deduction of Rs
17,000/- ( in addition to the deduction of Rs 12,000/- for the medical
insurance on self and family) and the father will get deduction of Rs
13,000/-.

EXAMPLE 2
An individual assessee pays through credit card during the previous year
health insurance premium as under:1.Rs. 12,000 to keep in force an
insurance policy on his health and on the health of his wife and
children2.Rs. 17,000 to keep in force an insurance policy on the health
of his parents.
Under the proposed new provisions, he will be allowed a deduction of
Rs. 27,000(Rs. 12,000 + Rs. 15,000) if neither of his parents is a senior
citizen. However, if any of his parents is a senior citizen, he will be
allowed a deduction of Rs. 29,000( R s . 1 2 , 0 0 0 + R s . 1 7 , 0 0 0 ) .
Whether the parents are dependent or not, is not a
consideration for deciding the deduction under Section 80D.

EXAMPLE- 3
Question:- In the last budget, the finance minister announced
exemptions for Mediclaim charges paid for senior citizens. However, I
am not sure if it has yet been notified and effective. I need to take
medical insurance for both my parents, who are senior citizens. I would
appreciate if you can let me know. Answer:- Earlier Sec 80D deduction
in respect of medical insurance premium was Rs 15,000 for an
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individual and Rs 20,000 for a senior citizen. However, from this year, if
someone were to buy medical insurance for his parent/s, an additional
deduction of Rs 15,000 (over and above Rs 15,000) will be available. If
such parent/s were senior citizen, the additional deduction would be Rs
20,000. So a person insuring himself, his spouse, children and parents
could potentially get a deduction of Rs 35,000. This provision is
effective from 1.4.08.

Appendix: Section 80D of the Income Tax Act

Deduction in respect of medical insurance premium.
80D. (1) In computing the total income of an assessee, being an
individual or a Hindu undivided family, there shall be deducted
such sum, as specified in sub-section (2) or sub-section (3), payment
of which is made by any mode, other than cash, in the previous year out
of his income chargeable to tax.
(2) Where the assessee is an individual, the sum referred to in subsection (1) shall be the aggregate of the following, namely:
(a) the whole of the amount paid to effect or to keep in force an
insurance on the h e a l t h o f t h e a s s e s s e e o r h i s f a m i l y a s
d o e s n o t e x c e e d i n t h e a g g r e g a t e f i f t e e n thousand rupees; and
(b) the whole of the amount paid to effect or to keep in force an
insurance on the health of the parent or parents of the assessee as does
not exceed in the aggregate fifteen thousand rupees.
Explanation. For the purposes of clause (a), family means the spouse and
dependant children of the assessee.
(3) Where the assessee is a Hindu undivided family, the sum
referred to in sub-section (1) shall be the whole of the amount
paid to effect or to keep in force an insurance on the health of any

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member of that Hindu undivided family as does not exceed in the

aggregate fifteen thousand rupees.
(4) Where the sum specified in clause (a) or clause (b) of sub-section (2)
or in sub-s e c t i o n ( 3 ) i s p a i d t o e ffe c t o r k e e p i n f o r c e a n
i n s u r a n c e o n t h e h e a l t h o f a ny person specified therein, and who
is a senior citizen, the provisions of this section s h a l l h a v e e ffe c t a s
if for the words fifteen thousand rupees, the words
t w e n t y thousand rupees had been substituted.
Explanation. For the purposes of this sub-section, senior citizen means
an individual resident in India who is of the age of sixty-five years or
more at anytime during the relevant previous year.
(5) The insurance referred to in this section shall be in accordance with a
scheme made in this behalf by
(a) the General Insurance Corporation of India formed under section 9 of
the General Insurance Business (Nationalization) Act, 1972 (57 of 1972)
and approved by the Central Government in this behalf; or
(b) any other insurer and approved by the Insurance Regulatory and
Development Authority established under sub-section (1) of section 3 of
the Insurance Regulatory and Development Authority Act, 1999 (41 of
1999).]

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FREQUENTLY ASKED QUESTIONS

Q: Why do I need Health Insurance?
A: The advent, of multi-specialty hospitals equipped with latest
technology and facilities with availability of costly but more effective
and newer medicines, lead to higher cost of treatment to be born by
the patient. Health Insurance takes care of the unforeseen
hospitalization expenses, which you may require to incur in case of any
ailment or accident.
Q: What is Mediclaim Policy?
A : M e d i c l a i m P o l i c y i s a h o s p i t a l i z a t i o n b e n e f i t p o l i c y,
w h i c h t a k e s c a r e o f medical expenses incurred during
Hospitalization / Domiciliary Hospitalization of the Insured for
treatment of illness / disease / injury contracted during the
policy period. Pre-hospitalization medical expenses incurred 30 days
before admission and Post-hospitalization expenses 60 days after
discharge from the hospital are also covered under the policy but all such
expenses should be consistent with the diagnosis for which the patient
was hospitalized.
Q: What are the medical expenses covered under Mediclaim policy?
A: The policy covers reimbursement of reasonable and
necessary expenses for treatment of illness / disease / injury
contracted during the currency of the policy l i k e r o o m r e n t ,
n u r s i n g c a r e , D o c t o r s f e e , i n v e s t i g a t i o n s c h a rge s ,
m e d i c i n e charges, operation theatre and like expenses, which fall
within the available limit up to the maximum of Sum Insured in
any one period of insurance stated in the policy schedule.

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Q: What are the expenses not covered under Mediclaim policy?

A: Mediclaim policy does not cover the following:
1. Expenses incurred on cost of Spectacles, Contact Lenses, Hearing
Aids, Dental Treatment unless requiring Hospitalization, Sterility,
Intentional self injury and other exclusion clauses mentioned in the
policy
2. .2. Expenses incurred at Hospitals/Nursing Homes primarily for
Diagnostic, X-Rays or Laboratory examination, which are not
consistent with or incidental to the diagnosis and treatment of the
positive existence of any ailment.3. Ambulance charges, registration /
admission / file charges, extra food charges, attendant charges etc.
Q: Can my whole family be covered under a single Mediclaim
policy?
A: Yes, your spouse, 2 dependent children & dependent parents can be
covered and family discount of 10% is available on the Premium paid
for them.
Q: What is the age limit for Mediclaim policy?
A: The Insurance is available to persons between age of 5 and 80 years.
Children between the age of 3 months and 5 years can be covered
provided one or both parents are covered concurrently.
Q: Can treatment be taken from any Hospital/ Nursing Home?
A: This claim is payable only when the treatment is taken in a
Hospital/Nursing Home in India which is either:
Registered as a Hospital or Nursing Home with the local authorities,
and is under the supervision of a registered and qualified medical
practitioner, OR

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Which complies with the minimum criteria:

It has at least 15 beds
A fully equipped operation theatre of its own where surgical operations
are being carried out.
A fully qualified nursing staff around the clock under its employment.
Fully qualified doctor in-charge round the clock.
Q: Are all the systems of medicine covered under Mediclaim?
A: No, Mediclaim policy covers treatment taken from Allopathic,
Homeopathic,Ayurvedic and Unani systems of medicines but it does not
cover Naturopathy treatment
Q: Does Mediclaim policy cover benefits for treatment taken
outside India?
A: No but Mediclaim protection is available for illness / disease / injury
contracted anywhere in the World provided the treatment is taken in
India.
Q: What happens when I have to undergo a treatment like dialysis and I am
discharged on the same day?
A: When treatment such as Dialysis, Chemotherapy, Radiotherapy etc. is
taken in the Hospital / Nursing Home and the insured is discharged the
same day, the treatment would be considered to be taken under
Hospitalization section of the policy and the claim would be admissible.
Q: Who can avail group Mediclaim Policy?
A: Any Homogeneous Group / Association / Institution / Corporate body
provided it has at least 100 persons to be covered and a Central
Administration.
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Q: What will the policy pay?

1.Actual hospitalization expenses, subject to a maximum of Rs. 15,000
to Rs.3 lakhs, sum insured chosen at the inception of the policy.
2.Actual domiciliary hospitalization expenses limited to Rs.3,000 to
Rs.45,000, depending on the sum insured chosen at inception.
3.Cost of the health check up is reimbursable at the end of four
continuous claim free underwriting years.
4.The sum insured will be increased by 5% as cumulative bonus for
every claim free year.
5.Maternity expenses incurred in hospital or nursing home as in-patient,
subject to the limit specified or Rs. 50,000/- whichever is lower will be
paid. This will be given on payment of extra premium and policy being
limited to cover maternity benefits. All terms, benefits and conditions of
the cover aresubject to the definitions of various terms under the policy.
Q:What will the policy not pay?
Broadly, the policy will not pay claims under the following
circumstances:
1.Domiciliary Hospitalization: Pre and post hospitalization treatment,
treatment of asthma, chronic nephritis and nephritis syndrome, gastroenteritis, diabetes mellitus, hypertension, influenza, cough and cold,
all psychiatric disorders, tonsillitis and upper respiratory tract infection
and rheumatism or any treatment relating to illness or disease already
inexistence at the time of proposal.
2.Any disease or injury during the first 30 days of commencement of
the policy (accidental injury is not exclusion).
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3.In the first year of cover, cataract, benign prostatic hypertrophy,

hysterectomy, hernia, hydrocoele, congenital internal diseases, fistula in
an, piles, sinusitis and related disorders or any pre-existing disease or
illness, that is not covered during renewal also.
4.Vaccination, inoculation, circumcision or cosmetic treatment, plastic
surgery, dental treatment, unless requiring hospitalization necessitated
due to the accident or as a part of any illness.
5.General debility conditions, sterility, venereal diseases, intentional
self-injury, use of intoxicants.
6.Any treatment related to pregnancy, childbirth and voluntary medical
termination of pregnancy during the first 12 weeks of pregnancy.
7.Cost of spectacles, contact lenses and hearing aids

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Case Studies
Case study 1
Claims not allowed in some case

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Case Study - 1 Claim rejected by New India Assurance on the grounds

of exclusion of cancer in the insurance policy In 1998, Mrs. Laxmi
Subramanyam's had carcinoma of left breast and she got treated. In
2001 both husband and wife took a Mediclaim policy with New India
Assurance. The policy excluded carcinoma of left breast because it was
pre- existing. Later, she was diagnosed with carcinoma of right breast,
which was not a recurrence, according to the doctor of Tata Memorial
Hospital, Mumbai, but a new case of carcinoma, so she had a full
treatment at Tata Memorial Hospital. He has submitted his claim of Rs.
80,000 to the Third Party Administrator of New India Assurance Co.
Ltd., i.e., Raksha TPA Private Ltd. But they rejected the claim on the
grounds thats he had claimed for the left breast, which was an exclusion
in the Policy. When he sent his grievance to CNBC Watch, then they got
in touch with the insurance company and the company agreed to accept
claim. Prior to this Mr. K S Subramanyam had written the following
letter to New India Assurance Co. Ltd. My wife and me are covered with
New India Assurance Co. Ltd. for Mediclaim since May 2001. This is
the fourth consecutive year we are insured, with no claims till recently.
My wife had cancer on her left breast in 1993, was operated upon at Tata
Memorial Hospital, had a full course of chemotherapy (in India &
UAE), and was having regular check-ups at UAE till April 2001 (when
we returned to India for good). There are two letters from the hospital
where she was undergoing chemotherapy and regular check-ups, to the
effect that as of December1998, she remains a symptomatic and free of
any detectable disease. These letters were attached at the time of
applying for the first Mediclaim Policy in May 2001. Still, they excluded
carcinoma of the left breast and its complication in the Policy, and I had
no other alternative but to agree, since only the four Govt. Insurance
Companies offered Mediclaim. Now in December 2004, she had a small
lump in her right breast and diagnosis proved it was in the very early
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stage of carcinoma. She had the lump removed at Tata Memorial

Hospital, and as per their recommendation, underwent a full course
of radiotherapy. When I submitted my claim to the Third Party
Administrator of New India Assurance Co. Ltd., i.e., Raksha TPA
Private Ltd., in February 2005, first they rejected the claim on the
grounds that I have claimed for the left breast, which is exclusion in the
Policy. This means that they have not scrutinized the claim properly, and
the intention was very clear: not to admit the claim. When I wrote to
them saying that the claim is not for the left breast, but the right one,
now I am given to understand that they are not taking any action, as,
according to them, once a person has cancer, then they don't admit any
claim for the future, even if it not a recurrence. I have a letter issued by
the Chief of Surgical Oncology, Tata Memorial Hospital, clearly saying
that this case is a new one and not a recurrence of the old case of 1993.
Nobody gives me a proper reply at Raksha TPA, and every time they say
that the file is "put up for re-processing," but nothingis happening. This
seems just harassing the policyholder with no intention of settling the
claim. Since I have three letters (two from Oncology Consultants in
UAE stating that she was free of any Detectable disease as far back as
1998, and the letter from Chief of Surgery of Tata Memorial Hospital,
stating that this case isa new one and not a recurrence of the old case), I
feel that Raksha TPA may not beright in rejecting my claim. I shall be
thankful to have your advice on how I should proceed, in getting my
claim admitted and settled. Regards, K. S. Subramanyam Response by
the company In cases of cancer the chances of recurrence is 8% to10%
higher but while taking the policy, only cancer of left breast was
excluded. Moreover, the doctor at Tata Memorial Hospital has certified
that right breast cancer was a fresh case of cancer, hence we grant their
claim of Rs 80,000.

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Case Study 2
Deficiency in service
Deficiency in Service Mr. Devinderpal Singh, a resident of Jamalpur,
had taken a Mediclaim policy from the company for his 10-year-old son
Raja. He was insured for Rs 20,000 for the period from October 13,
1998 to October 12, 1999. The complainant stated before the forum that
in the first week of November, 1998, hisson, felt severe pain in his
abdomen. After the medical examination, a stone was found in his
kidney. Thereafter, Raja was taken to the Sidhu Hospital for the
treatment and there he underwent treatment in November 1998. The
complainant stated that he had spent huge amount on his treatment but
could not preserve all the bills and submitted the bills for Rs 18,500. The
company pleaded that the said policy was obtained after concealment of
the precious disease as the disease was pre-existing at the time of taking
the policy as such the claim was not payable. The company further
stated that Dr Tarsem Lal Gupta who was referred the case for the
medical opinion, said Raja was suffering from pre-existing disease at the
time of taking the insurance policy and as the claim fell within the
exclusion clause No.401 of the policy. The company maintained that the
claim was rightly repudiated. The forum observed, "It appears as if the
father of Raja had knowledge of the disease and as such he took the
policy to meet the expenses of the treatment. The forum stated that the
disease was pre-existing and was not covered under the policy. The
forum further added that the company had intimated the complainant
that the claim lodged was considered as 'no claim' as per the rules of the
policy. The forum held that there was a clear deficiency on the part of
the company for not intimating the complainant. CDRF asks OIC to
make full payment of Mediclaim.
Case Study 3
3. Consumer Forum Cases (Some Judgments)
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The Hindustan Times Chandigarh dt 31st march'2010 .carried the details

of the case; Mr. Ahuja is having Health Insurance from Royal Sundaram.
He was diagnosed with CAD angina, for which he had to undergo
Coronary Angiography and Angioplasty, which was informed to
company with proper procedure. But company rejected the claim on the
ground that complainant was known case of Hypertension since 2000.
On explanation by the customer company replied that the complainant
concealed the fact that he suffered from Heart disease along with
Hypertension since the year 2000, which is specifically excluded under
policy terms. Consumer Forum judgment: It cannot be said if the
complainant was suffering from Hypertension nor can it be said that he
concealed the disease at the time of purchasing the policy. Needless to
mention that CAD is totally different disease than hypertension. The
claim for CAD therefore cannot be repudiated on the ground that the
complainant was suffering from Hypertension. We appreciate this
judgment as it has been customary for the insurance companies to reject
the claim on the basis by taking the lea of hypertension.

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